Oct. 26 (Bloomberg) -- Crude oil fell the most in a month as the dollar advanced from a 14-month low against the euro, reducing the appeal of commodities. Energy and metal futures dropped after the U.S. currency rebounded. Oil also fell as the Standard & Poor’s 500 Index slumped on concern the government will phase out a tax credit for homebuyers and Bank of America Corp. will have to sell shares to pay back its government bailout.
“This is a dollar play,” said Stephen Schork, president of consultant Schork Group Inc. in Villanova, Pennsylvania. “If you get a sustained rally in the dollar, oil is going to fall below $60.”
Crude oil for December delivery fell $1.82, or 2.3 percent, to end the session at $78.68 a barrel at 2:46 p.m. on the New York Mercantile Exchange, the biggest drop since Sept. 24. It was the lowest settlement since Oct. 16. Prices have gained 76 percent this year and reached a one-year high of $82 a barrel on Oct. 21.
“Because of a dearth in economic data today, the fluctuations of the currency market are the main determinate of the oil market,” said Jason Schenker, president of Prestige Economics LLC, an Austin, Texas-based energy consultant.
The dollar climbed 1 percent to $1.4855 per euro from $1.5008 on Oct. 23. It traded as low as $1.5063 earlier today, the weakest level since August 2008.
The S&P 500 Index dropped 1.1 percent to 1,068.27 and the Dow Jones Industrial Average fell 1 percent to 9,871.29.
OPEC Production
The Organization of Petroleum Exporting Countries will meet Dec. 22 in Luanda, Angola, to review its production quotas. Some member countries are able to pump more oil if the market requires it, OPEC President and Angolan Oil Minister Jose Maria Botelho de Vasconcelos said in an interview late yesterday. more...
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